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BUSINESS

Record profits put Ferrari in pole position for 2016

Italian luxury sports car maker Ferrari said on Monday it clocked up its best profits ever in the first quarter, setting it up for record earnings for the full year 2016.

Record profits put Ferrari in pole position for 2016
Photo: Giuseppe Cacace/AFP

Net profit rose 19 percent in the first three months of the year from the same period in 2015, to €78 million ($89.7 million).

Revenues were up just under nine percent, and Ferrari cut its debt by €15 million to €782 million.

Ferrari delivered 1,882 cars in the quarter, up 15 percent, it said in a statement headlined “Strongest ever Q1, on the way to another record year”.

Volume growth was driven by the automaker's eight-cylinder (V8) segment, including two new models, the 488 GTB and the 488 Spider.

Shipments of its V12 models declined by six percent.

Among Ferrari's main world markets, Europe, the Middle East and Africa recorded the highest unit growth at 24 percent, while China, Hong Kong and Taiwan increased by 16 percent.

Shipments to the Americas rose by a comparatively weak two percent.

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BUSINESS

EU finds Italy’s Alitalia loans ‘illegal’ but airline free to keep money

The EU's antitrust authorities ruled Friday that Italy's 900 million euro loans to long-struggling airline Alitalia were "illegal", but cleared the country's new carrier to get state funding and avoid paying back the money. 

Ahmad AL-RUBAYE / AFP
Ahmad AL-RUBAYE / AFP

“Following our in-depth investigation, we reached the conclusion that two public loans worth EUR 900 million granted by Italy to Alitalia gave the company an unfair advantage over its competitors, in breach of EU State aid rules,” said EU competition chief Margrethe Vestager said in a statement.

“They must now be recovered by Italy from Alitalia to help restore a level playing field in the European aviation industry.”

But the authorities in Brussels simultaneously said new flag airline ITA – set to start flying next month – was not liable to reimburse the money and that 1.35 billion euros being injected into the firm by Rome did not breach state aid rules.

“Italy has demonstrated that there is a clear break between Alitalia and the new airline ITA, and that its investment in ITA is in line with terms that a private investor would have accepted,” Vestager said.

“Once ITA takes off, it is for Italy and ITA’s management to make use of this opportunity once and for all. And we will continue to do our part to ensure fair competition in the European aviation sector.”

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Loss-making Alitalia was placed under state administration in 2017 but Italy has struggled to find an investor to take it over. The situation was only exacerbated by the coronavirus pandemic that grounded airlines worldwide.

The Italian government gave the company two loans for the amount of EUR 600 million and EUR 300 million in 2017, as Alitalia scrambled for liquidity without access to the debt market.

Earlier this year Italy said it had reached an agreement with the European Union for a bailout that creates a new debt-free company to take over some of Alitalia’s assets – ITA.

The board of directors of ITA last month approved a binding offer for 52 of Alitalia’s aircraft, related airport slots and other assets.

The Italian government has created a 100-million-euro ($117-million) fund to reimburse Alitalia customers.

Italy provided state loans to Alitalia totalling 1.3 billion euros between 2017 and 2019.

In July, it approved another 700 million euros for ITA.

Further sums are expected in 2022 and 2023, bringing the total to 1.35 billion euros.

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